“Junk” bonds have never paid so little. Which makes them pointless. We’re here for the yields, not the credit quality!
Fortunately we can improve our dividends and our safety by being smarter. We are going to simply sell the popular 4%+ bonds and replace them with better 8%+ yielding equivalents.
First, the dogs. Anyone who owns either of the two most popular high-yield bond ETFs is a sad income investor today. Their yields are at all-time lows. The SPDR Bloomberg Barclays High Yield Bond ETF (JNK), for example, pays only 4.3%:
JNK’s Current Yield is Junk
And it gets worse, because this trailing yield looks better than the year ahead.… Read more